Why Is Decathlon In a position to Sell Its Products In a Cheaper Cost When compared with Its Competitors In Singapore?
Any Singaporean who is into fitness will most likely discover that Decathlon’s sports gear less expensive than other sporting brands. What's less known is how the company reached this level of industry dominance without clashing using its more well-known counterparts like Adidas or Nike. Its rise being an affordable quality sportswear retailer is tied to business design innovation and how it can create popular sports merchandise at low cost.
Decathlon's Journey To Make Sportswear Universally Affordable
Decathlon is a French retailer of sports merchandise. It were only available in 1976 like a wholesaler before creating its own sportswear brands and acquiring competitors. The organization is different from competitors for the reason that its goal would be to provide the best sports products to everyone. To do this goal, Decathlon offers top quality products at low prices, often 20% lower than the least priced alternative.
With over 1600 stores in nearly 1000 cities across the world, this strategy seems to be working. In Singapore, Decathlon has around 11 stores and contains stealthily claimed more share of the market against major sports brands like Adidas and Nike.
An Early Foray Into Online Retail, Translated Into First Mover's Advantage
Decathlon first arrived on Singapore’s shores in 2021 being an online store. It launched its first physical outlet at Viva Business Park in Chai Chee three years later. Part of its success in penetrating the local market was its ability to translate online demand into physical retail prowess, incorporating technology into everyday experiences for shoppers. For example, shoppers can don a virtual reality headset and experience tents via a number of weather conditions, allowing them to experience their purchase even before they leave the shop.
Going online also allowed Decathlon in order to save significantly on rental costs in the past and to maintain an online business that is well-differentiated when compared with other brick-and-mortar distributors like Royal Sporting House and Sportslink.
Here's a brief take a look at a number of Decathlon's most popular low-priced products.
Beginner Trial Kits
Decathlon offers various trial kits for beginners who wouldn't wish to invest much into a sport they aren't sure they’ll stay with. There are kits for popular sports like running and swimming to more leisurely pursuits like fishing. These kits aim to be an all-you-need means to fix try out a brand new activity without needing to perform a lot of prior research and get everything gear together. Just buy and go, convenience at your fingertips.
Decathlon’s fitness apparel is breathable, durable, and, most significantly, moisture-wicking (moving moisture away from your skin). Considering that it's usually priced around $20 or less, it is hardly surprising that this brand is gaining popularity among sports enthusiasts.
The retailer’s compact items will your style in the users hand of your hand, and they are perfect for a wide variety of users. From professionals in the CBD who want to drop by a fitness center after or before working hours to seize delivery cyclists who wish to have a utility belt to assist them to with the intensity of cycling in the tropics, the retailer has a buffet of low-cost sporting accessories that you should select from. They include belt bags, micro towels, and ultra-compact mountain trekking caps.
Decathlon’s snorkeling gear is renowned for its outstanding quality and reduced price. Their snorkeling kits tend to be more affordable than most other alternatives, so they appeal to an enormous community of beginners or learners.
Diversified Product Portfolio
One of the most major reasons for Decathlon’s affordable prices is its diversified portfolio. The retailer has specific offerings for over 86 sports in its international portfolio, 70 in France (its home country), and 60 in Singapore. This degree of diversification permits the retailer to learn even when it sells products at small margins. Unlike competitors like Nike and Adidas, the organization doesn't significantly mark up individual products’ costs.
Integrated Business Model
Decathlon has a fully integrated business design. The organization controls its entire supply chain and forms exclusive partnerships when entering untouched markets. This enables these to further lessen the cost of goods to the final buyer.
Integration gives Decathlon a significant amount of control over its products. Raw materials are often expensive and difficult to locate, so they dramatically modify the final cost. But, since the clients are fully integrated, there is less risk of uncertainty. This provides them strategic independence and also the capability to set huge discounts.
An interesting example of Decathlon’s exclusive partnerships is its recent agreement with the National Basketball Association (NBA). Per the the deal, Decathlon has become the NBA’s official licensee across Asia, Africa, Europe, and Latin America. Their bond covers an extensive selection of NBA team and league-branded accessories, base layers, and accessories. The offer allows Decathlon to deliver products at a reasonable cost.
Lean Logistics And Speedy Delivery
Lean logistics comprises the techniques enacted to identify and remove wasteful/unnecessary activities in the logistics to enhance product flow and speed. It involves activities for example limiting excess inventory and improving freight transport efficiency.
With efficiency driving its logistics, the organization will be able to boost the speed of delivery by reduction of delays in shipping and distribution. This reductive process helped the company delight their clients by delivering orders under 2 hours. That's almost as fast as ordering a pizza.
Decathlon achieves these through various policies which include:
– Limited packaging: The organization eliminates packaging wherever it isn't needed. Its shoes, for instance, aren't sold in shoeboxes.
– Cashless payments: Decathlon uses a complex system that mixes RFID, QR code technology, and iPhone payments to enable shoppers to check out their purchases any place in the shop using smartphones, apple watches, gift cards, and also the more conventional debit and charge cards. This policy permits them to reduce their carbon footprint and the amount of time wasted at point-of-sale terminals.
– Strategic warehousing: Decathlon puts its warehouses near to the stores to improve logistical efficiency. Also, the company has adopted automation to enhance productivity. A lot of Decathlon’s storage facilities now employ Goods-to-Person robots which allow human workers to process over 140 customer orders every hour. This approach minimises human error and also the costs of hard physical work.
Decathlon searches for out smart costs – areas where they can save so they can cut prices further. Unlike its competitors, the retailer doesn't hire influencers or run lavish promotional initiatives. Its stores don’t get much of decoration either. These strategies amount to significant cost cuts.
Designing products for that mass-market considerably lower the company’s operating cost. Decathlon’s design teams have extensive knowledge of each sporting activity's specifications, together with effective qc over the manufacturing process.
The company also optimizes materials, components, assemblies, and shapes to build up quality products efficiently and cost-effectively. The teams also frequently search for innovative ways of simplify design without having affected the ultimate product’s quality.
Decathlon's design philosophy includes:
– Efficient Manufacturing
The company forms long-term alliances using the best industrial suppliers, whom it frequently audits to ensure safe working conditions. By carefully choosing its partners, the company can ensure productivity without abandoning its core values, such as improved risk management and improved times to market.
– Research and development
Decathlon is home to several growing passion brands (brands focused entirely on performance and innovation that cover a specific sports industry or segment). Bringing all these unique startups together enables the organization to pool research and development resources and innovative capacity. This increases development efficiency, which facilitates price cuts.
Affordable Sports Gear For each Occasion
Decathlon’s strategy combines innovation, brand design, and customer support to provide customers incredible value in an unbeatable price. The brand’s mission would be to make the best products available to everyone covering an array of sporting activities. You will discover much more about Decathlon's product catalogue here.